Forex minor currency pairs are crosses between majors but that not include the Dollar. Crystal clear, the Dollar is indeed the worldwide currency reserve and the most traded currency in the world, but life doesn’t end with the USD. So, there is life with Forex minors!
What are minor currency pairs
As mentioned before, minor currency pairs are all majors traded between themselves except the dollar. The most popular minor pairs include the euro, the British pound, or the yen. All crosses have different levels of volatility and work better in specific trading hours.
The forex minor pairs list includes the EUR/GBP, the EUR/AUD, the GBP/JPY, the NZD/JPY, AUD/JPY, and the CHF/JPY among others.
Forex minor pairs list
Euro to British pound: The EUR/GBP, or GBP/EUR in the United Kingdom, includes two of the most important currencies in the world. The pair is popular in the European Session, and most fund managers like to use it as collateral or source of confirmation for other crosses.
British pound to Japanese yen: The GBP/JPY is also known as the wild west, the Geppy or the best of the currency market as it is one of the most volatile pairs in the forex world. Spread is high, and it involves high risk associated.
The EUR/GBP has excellent liquidity and has some correlation with the EUR/USD. The cross offers unique opportunities in the short and long term with less volatility than the GBP/USD or the EUR/USD. It is a trending pair.
The GBP/JPY moves around 150 pips daily on average, and it requires a lot of respect and concentration. It has a positive correlation with USD/JPY and EUR/JPY and a negative correlation with EUR/USD.
Euro to Japanese Yen: the EUR/JPY is another essential minor pair as it is the seventh most-traded currency pair with around 3% of all daily transactions. It is a volatile cross that offers good trading opportunities. Traders in the Asian session and the European morning like the cross. The EUR/JPY has a strong correlation with GBP/JPY.
How to trade forex minors
So, the million dollar question: How to trade forex minors. First of all, it is essential to understand that minors are usually more volatile than majors. Second, every currency answers to how the country and its economy is doing.
So, if the economy of a country is heavily linked to oil like Canada, you should pay attention to oil prices when you are trading a Canadian related pair like the GBP/CAD or the AUD/CAD.
In the case of Australia, which country has substantial gold reserves, the Australian dollar is connected to gold prices. So, the GBP/CAD would be a heavily commodity-linked pair.
Now, some pairs provide more volatility than others, for instance, the EUR/GBP, the EUR/CHF and the GBP/CHF are more stable pairs than the GBP/JPY, the EUR/JPY or the GBP/CAD.
In the case you want to trade forex minors, be sure your broker’s platform supports those currencies and crosses. Typically, all brokers have forex minors, but it is always good to be sure. Remember, we are traders and we follow the facts to anticipate the unlikely.